I speak, therefore, I think, therefore I am.

I don’t always write from my expertise on this blog, but usually, I write from the heart, sharing experiences, questioning my own beliefs, and proposing solutions that I apply to my own life. This is one of those days, mostly. I conduct this public introspection because I know that many of you are grappling with similar issues. Many others have already found their way through and have much to share. We desperately need those perspectives here in our community.

Last Friday I was immersed in a busy day of university meetings and essay grading. I did not know we dropped down through key levels until I looked at the blog after the close. But the entire day I had a feeling that something was wrong. I attributed it to the Scots (my people) voting to stay in the commonwealth and especially the story about the British move away from US T-bills.

The dollar is being ushered off the international stage, kicking and screaming, threatening retaliation, war, and disaster for all. Now we read that Kenneth Austin, a Treasury Department economist [thank you Dan] called for the end of dollar reserve status, and China is parking a destroyer in an Iranian port, a stone’s throw from American protected ports across the gulf. As they build a petro-yuan system we see the world is changing! Perhaps the US is cooperating behind the curtain?

But my negative feelings went deeper than the usual news stories. After some thought, it slapped me in the face: I still value dollars over metal. I see metals as an “investment.” Thus, when my “investments” do well, I am in a good mood and have increased self-confidence. When my investments fall, I second guess all my decisions and my self-confidence takes a kick in the gutsass testicular region.

“Where you treasure is, there will your heart be also.”

My mind knows better; it’s my heart that is confused. I read, process, and come to logical conclusions. Thus I trade dollars for metal, knowing that a day will come when that metal will save my family.

When I first learned there was a thing called money, I soon realized I could exchange it for candy and toys. My allowance was in dollars. Everything I desired was denominated in dollars. My paper route customers paid me in dollars. Later, my paycheck was denominated in dollars, my expenses were in dollars, so were the value of my possessions—both assets and debts. My small business, my equity in the house, my mortgage, my car loan, dinner at the Mexican restaurant, groceries, vacations—they are all denominated in dollars. How can I ever escape?

This “dollar paradigm” is where I was successful and respected by peers, where I had found success and respect with my employer and profession. My credit rating, yes my precious credit rating, was strong and bankers always said “yes” when I wanted to borrow more dollars. I live within a dollar paradigm that permeates my heart to the point that metal that I have acquired gets denominated in dollars, just like everything else, though many here have continuously reminded us not to do that.

How do I break that heart-dollar connection and value my possessions in metal? Once I am able to see silver for what it is, able to see the intrinsic value of my pantry, self defense equipment, property, land, then my heart can take satisfaction in those things and NOT have to convert their value to dollars.

Damn! These American banking propagandists have done an effective job!

The problem leaks out of my heart and has firmly shaped my vocabulary--and I think people following Bernay's tactics had a hand in it.

Here is where we find the key to change: I must change the way I talk about metals. Descartes left this critical step out of his famous equation. One cannot reason without words.* If these brains of ours did not have language, we would quickly invent it. Words shape our thought, our perceptions and guide our evaluations of experience.

Bernanke knew this. He publicly called gold a "barbarous relic." He was a step ahead of most, taking an active role in shaping public perceptions.

One trader-blogger is not fooled by Bernanke, yet he still asserts that gold is an “asset class.” Though he and his followers may hold gold, this vocabulary reveals that he denominates his world in dollars and his fortunes will rise or fall with this current financial system. I say "good luck" to traders who think they can click their mouse before a flash crash sets in, or that their trading platform will execute their stops before that price runs their account down by 40%.

We use metaphors that powerfully shape our views of the world: if I say "gold or silver is a hedge,” this metaphor will keep metals firmly denominated in dollars in my mind. Even the “insurance policy” metaphor keeps metal denominated in dollars as it “writes a check” to cover “losses” after the collapse.

Metaphors that cut the dollar-silver connection would a “lifeboat,” a “fortress,” or a “vehicle” to carry you into the new economy. I’d love to hear some other metaphors that will reprogram my heart.

If we go a level deeper, we get at grammar. We divide our world into grammatical agents, objects, actions, and effects (in the English language). In my brain, I am an agent (buyer), silver is an object, the action is “investment” and a rise or fall in dollars is the effect. As long as I talk about silver with that grammatical structure, it will, in turn, structure my emotional responses. Good effects mean feeling good, and vice versa. I have a couple of choices for changing my grammar. I am the agent, silver is the object, holding it is my action, and the effect is security. Or… silver is the agent, I am the object it acts upon, silver saves me, and the effect is security and stability.

So am sitting here this Sunday evening, watching the silver chart fall, again, realizing that as long as I watch these charts with dollar denominations on the Y axis, I am stuck in the dollar paradigm. My heart is just doing what I have trained it to do. Somehow, Pavlov comes to mind.

But now I am holding a $100 Benjamin in my left hand and five silver maples in my right. What am I to make of these? That chart on my computer, the price at provident.com, suggests they are of equal value. But they are not!

One is a piece of paper, printed ad naseum by an organization of bankers who do not have the best interests of our citizens in mind. It is backed by the “full faith and trust” of the US government. In past decades, when the economy was strong and a majority of American worked hard, that abstract promise had value. Today, the “full faith and trust” line comes from mostly corrupt politicians who accept bribes from corporations so they can buy enough media coverage to manage their public image and stay in power. That Benjamin on my desk now represents a den of thieves and liars. It is their “snake oil” being hawked to cure my ills.

In my other hand, my silver is hard, tangible, represents energy, labor, and expertise to get it out of the ground. It is beautiful. I can even drop a coin into my milk to allow it to keep longer. Clever people have found ways to use it for medicine, energy production, electronics—a lengthy list of practical uses. And it has a multi-thousand year history as a medium of exchange due to intrinsic principles. Politicians do not have to lie to me to persuade me to use it as money. This silver will carry my family back into prosperity in case of economic collapse.

A few days ago, a good friend and I discussed where to invest a large sum he is receiving from his retirement fund. He senses that the economy is in trouble and cannot see any security or profit in his usual investment vehicles. We talked about “investing” and what to “buy.” This grammar and vocabulary keeps the both of us living in a dollar denominated world. I need to go talk to him again and change my words. He can “acquire” metals and “hold” them so that they carry his family through whatever turmoil may come.

For me, and you, the key to shifting my affections to metals is to talk about them in a different way. They are not an investment, a hedge, an asset class, or speculative play. They are wealth, they are security, they are stability; they are a vehicle, a lifeboat, true money. Our action is to “hold” them and let them do what they do best. They will carry us into a new world.

* Many poets and culture critics discuss “thought as the reality” and “words as its representation,” but the philosophers, linguists, and scholars from my own field have published loads of academic crap arguing that language precedes thinking. If you doubt the likelihood of this assertion, here is a link to get started down this rabbit hole. Another link

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I asked this on Main street as well quite hard and got some answers that made me think of simple solution to gold price control. A privately owned cartel, controlled by ROTHS, GOLD Central bank. The usual CBs are Rock construct, and under USD control. They have come head to head lately ( well already in end of 60-ties drain of gold from the USA started) , but lately it has been a war won so far by gold CB vs fiat CBs.

It only needs gold to decide on gold prices, nothing more. So its kind of relatively independent on inflation etc but of course not fully immune as GOLD CB ( as fiat CB) has its limits how much physical gold it can lend out as lender of last resort to bullion banks etc.

This is the final discussion that lead me to this idea:

Quote:

OTC is settled in the dark. It is private deals between entities. OTC prices are not posted anywhere. COMEX is used to derive prices you see everywhere on the internet, etc.

That is why the paper prices do not derive from physical trades. This is critical to understand. I hope you get it.

Well London Fix is based on OTC trades in London. That is where physical price information comes from every day. They may be rigged etc but to some limit as we have seen in LIBOR etc cases. Relatively small amounts. And there is no difference between physical and paper prices. As Alonzo described, that would be impossible due to arbitrage. And as to extent the paper prices press on physical , the effect is also limited IF there is no physical supply for that price. PERIOD. And it works backwards as well- if there is no physical for that price, COMEX prices will be driven up by arbitrage. Fair or no fair. If there would be enough arbitrage gain , if JPM dumps 100 000 000 Oz, someone will buy 200 000 000 Oz on paper with leverage and loaned money as it will be a sure win.

So , I do not accept paper prices has long term impact on underlying commodity as long as there is HUGE, much bigger OTC market dealing in physical only ( incl OTC futures).

The only way to support fractional banking in GOLD is to have a cartel of gold holders that has created GOLD CB that supplies the bullion banks as lender or last resort. And its NOT our usual CBs. Usual CBs have limited gold sales and leasing and they are essentially ROCK installation. But GOLD CB is controlled by ROThs. That is how the game is played.

By changing GOFO or gold lease rates, ROTHS control gold supply;they may also call in gold loans further restricting supply; or they may lower rates into negative territory pushing gold into banks to lower gold price. Physical.

In 1940, world central banks had in total 38 000 tons in reserves.

From 1950- till 1998 on average had in total 35 000 tons in reserves .

Ever wondered where has the rest of production since 1945 gone? Average production from 1950-2010 was about 1500 tons/year, so total supply was 90 000 tons. It has not landed in CBs. Bar technological use, where is it? How much would a GOLD CB need? 20 000 tons out of 90 000 ? Is that realistic? I think definitely. Roths have under their control in some cartel we can call GOLD CB >=20 000 tons of gold. And that is like swing producer- it decides gold scarcity or abundance relative to physical demand, lender of last resort to bullion banks, and sets GLR. Can not be more simple.

of course GOLD CB has its physical limits to lend gold as fiat CBs has their limits to print fiat without destroying value. But in essence, operation is exactly the same, only owners are different- and interests. Recently ( 2011 aug) Gold CB won the fiat CB and now they act in forced agreement under the control of GOLD CB. Fiat CBs still try to break lose by confiscating gold even in minute quantities from conquered countries, or starting bacteriological crisis close to gold producing regions in Africa ( Ghana, Cote d Ivoire, Mali)

150 tons/year as a side effect of demonstration of bacteriological weapon and that USA has vaccine against it. No wonder every country is sending its medical teams in to catch the virus and try to develop vaccine. Remember the USA person who came to Atlanta, got some unapproved antibody or whatever, and walked out after 9 days completely healed.

WWIII was launched with Minsk agreements on September 5th , 2014 ( Munich -2) that allowed for split of Ukraine ( implemented by Ukraine parliament on September 17th, 2014) ,which is happening right now and will end with final split in May 2015 (approx) with protectorate of Novorossija, South East Ukraine gone to Russia.

A decentralisation of power, including through the adoption of the law of Ukraine "about local government provisional arrangements in some areas of Donetsk and Luhansk Oblasts" (law on the special status).

Ensure the permanent monitoring of the Ukrainian-Russian border and verification by the OSCE with the creation of security zones in the border regions of Ukraine and the Russian Federation.

To immediately release all hostages and illegally detained persons.

A law on preventing the prosecution and punishment of persons in connection with the events that have taken place in some areas of Donetsk and Luhansk Oblasts.

Continue the inclusive national dialogue.

To take measures to improve the humanitarian situation in Donbass.

Ensure early local elections in accordance with the law of Ukraine "about local government provisional arrangements in some areas of Donetsk and Luhansk Oblasts" (law on the special status).

Withdraw the illegal armed groups, military equipment, as well as fighters and mercenaries from Ukraine.

To adopt the program of economic recovery and reconstruction of Donbass region.

To provide personal security for the participants in the consultations.

Quote:

In the two weeks after the Minsk Protocol was signed, there were frequent violations of the ceasefire by both parties to the conflict.[6][7] Talks continued in Minsk, and a follow-up to the Minsk Protocol was agreed to on 19 September 2014. This memorandum clarified the implementation of the Protocol. Amongst some of the peacemaking measures agreed to were:[6][8]

To pull heavy weaponry 15 kilometres (9.3 mi) back on each side of the line of contact, creating a 30-kilometre (19 mi) buffer zone

To ban offensive operations

To ban flights by combat aircraft over the security zone

To withdraw all foreign mercenaries from the conflict zone

To set up an OSCE mission to monitor implementation of Minsk Protocol

ISIS is something of much smaller scale/importance, but has a role to play. So far mostly to boost DEMs chances in November elections.

Also, we are seeing some not so good economic numbers now. Closer to elections, they will get better, trust me.

..and since the resultant cognitive dissonance will amuse me, I've decided to touch upon a concept that most here do not want to understand. :D

So, here is the gedanken-experiment.

Who can tell me why it would be a monumentally stupid idea to use (say) maize as a singular store of value?

Consider price, social effects and resultant behavior.

To make the question somewhat easier let us assume that an efficient swap system (new for old) is in place so that no maize is lost to spoilage.

(Before you object that this is unlikely to occur in real life, the idea here is to illustrate the principle. We can expand the example to include other commodities once we have dealt with this simple case)

Ps. If I do get engagement I promise most here will learn something (though you may not want too). ^^

Since it would be rude of me to post a comment and not read your post, I did so immediately after.

It's a good post.

I would however submit that it is your mind that is confused, not your 'heart'. Bear in mind that this commentary is made from a different perspective. From your perspective I would agree, I just think you are wrong.

Holding your benjamin and your five maples I would ask, what can you get in trade for each, there is your answer to value. Forget the future, we always live in the now. Yes, in future the maples are likely to bring you more in trade, but at that stage you will again live in the now and the question will have changed. It will be say what can be had in trade for three benjamins or 5 maples.

I hope this helps (a little) in clearing up your confusion between heart and mind.

Ps. Given the topic du jour, it seems to me the question I am trying to raise in my post above is fitting for this post( if tangentially).

It is inevitable that we will become an Asian country. It will happen peacefully and not by military conquest.New Zealand is a multicultural paradise where people know how to behave. Our isolation from the rest of the world is our strength. (fingers crossed and touch wood)

I think- after and during WWIII- New Zealand/Australia will still remain in USA monetary ( and so all other) influence zones. China will expand first and foremost into Russia and Central Asia, also SE Asia after WWIII. I am wondering about India..according to all scenarious its is weak but will it really be Chinese dominated? I think it will benefit from WWIII by staying virtually out of it and after WWIII rise as independent power in South Asia. Lets see.

WWIV is a different thing. That should seal NZ as Asian country..but that is >25 years away. While WWIII is at our doors.. In Eastern Europe, especially. Latest spring 2016, if not Autumn 2015 in some parts already ( Moldova, may be Finland if it does not enter NATO beforehand.

Not so sure about multiculturality under Chinese governor and few million settlers :) but who knows..NZ may be kept as offshore place for Chinese elite, like Channel Islands or Luxembourg.

Hong Kong, being current place of gold CB somehow survives. Till 2047, according to transfer agreement.

Liberal magazine editor Katrina vanden Heuvel said Americans are not supportive of action beyond airstrikes against the Islamic State.

Progressives, wary of another open-ended conflict in the Middle East, are concerned President Barack Obama is bending to war hawks in Washington by using the military to stop the march of the Islamic State in Syria and Iraq.

On ABC’s This Week, Katrina vanden Heuvel, editor of the left-leaning magazine The Nation, said Obama has moved away from his foreign policy principle of "don’t do stupid stuff" and "surrendered to war party in both parties, to a media that has lathered up hysteria about a threat that is not an immediate threat to this country."

She questioned whether Americans areon board with increased military involvement.

"There's a barbarism and a gruesomeness to the videotapes (of the Islamic State beheading two American journalists) which have moved the American people at this stage to support strikes, but the support for ground troops is not there," vanden Heuvel said. "The support is very thin."

Did vanden Heuvel accurately capture the sentiment from Americans? We decided to take a look at the polling data.........

Washington should respect the sovereignty of Syria in its attempts to deal with the Islamic state, Russia’s Foreign Minister Sergey Lavrov said in a phone call with his US counterpart, John Kerry.

Lavrov and Kerry talked on Sunday at the initiative of the US Secretary of State, Russia’s Foreign Ministry said in a statement.

During the conversation, the Russian FM stressed “the importance of coordinated action... by the international community aimed at countering the threat” coming from the Islamic State (IS, formerly ISIS).

However, he warned against “double standards” and “distortion of facts” during the battle against the terrorist group, which has declared a caliphate in the occupied territories of Syria and Iraq.

Lavrov underlined “the necessity for strict adherence to the UN Charter and international law as well as unconditional respect for Syrian sovereignty during the implementation of plans by the US-led coalition, which includes the use of force," the statement by the ministry said.

Not even the Ray Rice scandal could yank professional football games from the top of television viewership rankings, said conservative commentator George Will.

Will participated in a Fox News Sunday political panel dissecting the NFL’s response to the video showing Rice, a former Baltimore Ravens running back, assaulting his now-wife in an elevator.

NFL Commissioner Roger Goodell’s performance has been widely criticized, but Will predicted he will survive the scandal.

Why? America’s real pastime is an economic behemoth that can’t be stopped.

"Last week’s three most-viewed television programs were Sunday Night Football, Thursday Night Football and Monday Night Football," he said. "And money talks and it will continue to talk. And this will pass over, and football will go on its merry way."

ISIS territory in Iraq and Syria tendstobedescribed as "swaths." The estimated size of these swaths, which ISIS leader Abu Bakr al-Baghdadi declared a caliphate in June, varies widely in reports, from 12,000 square miles—"an area the size of Belgium," per TheWall Street Journal—to 35,000 square miles, or “an area the size of Jordan,” as George Packer wrote this week in TheNew Yorker.

The 'caliphate' here is not so much a coherent territorial entity like Jordan or Belgium as a series of spreading cracks in existing states. There is no state-like border corresponding to the Aleppo-Mosul-Falluja perimeter.

"The land that ISIS controls is definitely riddled with holes that they do not control or do not see as a priority at this moment in time," explains Jomana Qaddour of Caerus Associates in an email. Her organization is one of a handful tracking ISIS's territorial gains, in part with local sources and researchers on the ground. Many bands of ISIS "control" traverse vast patches of desert without necessarily encompassing them. With the fall of Raqqa province's Taqba air base to ISIS this week, for example, the group is now considered to have "control of virtually the entire province," writes Qaddour. "This means controlling major cities and, yes, roadways—but you also have to realize that some of that area is desert, so what does 'control' of that kind of land even mean?"

If you consider parking a few shipping containers in the middle of nowhere for target practice for the French as control, you get the idea.

"The desert is not necessarily significant" from ISIS's perspective, Qaddour writes, "but the roads running through the desert are."

The same roads they refused to bomb when ISIS first rolled into town.

The Institute for the Study of War has attempted to more sharply define the gradations of ISIS control in the areas where it operates. Here's ISW's latest "ISIS Sanctuary" map, from mid-August:

The attack zones are the most straightforward and are meant to depict those areas in which ISIS has participated in or perpetrated armed clashes or kinetic engagements (such as IEDs). Support zones are areas in which ISIS enjoys freedom of movement and from which such attacks are often staged: they are areas in which ISIS does not necessarily possess defensible control, but in which ISIS forces can nonetheless travel and operate with relatively low risk. Control zones, then, are areas in which we have assessed ISIS to have a larger degree of defensible control ... in which a counter-ISIS force would be faced with serious ISIS resistance.

Crucially, while those control zones don't amount to 35,000 square miles worth of territory, they do encompass major population centers, which tend to be concentrated along major roads. "The aims of the 'Caliphate' explicitly include population control, and ISIS has continued to prioritize the acquisition of populated geography," Cafarella writes. So the key elements of the Islamic 'State' are its network of population centers, oil resources, and military infrastructure, connected by roads.

But does all of this add up to a "state"? By the oft-cited definition articulated by Max Weber in the early 20th century, a modern state requires a monopoly on "the legitimate use of physical force ... within a territory."

More in the above linked article. If they bomb the population centers... That can't be dealt with by airstrikes alone.

In conjunction with these governance projects, ISIS has worked to legitimate its vision for a caliphate as laid out in publications such as the English-language magazine Dabiq. ISIS has argued that it has the duty to govern both the religious and political lives of Muslims. Under this model, ISIS leader Abu Bakr al-Baghdadi is both ISIS’s chief religious official and its senior statesman. ISIS sees itself as an all-encompassing entity, one that eventually is meant to shoulder all the responsibilities of a traditional state. Though maintaining some practical state functions that derive from effective urban management may not be within his capacity.

ISIS’s sweeping yet exclusionary method of governance is potentially one of the organization’s greatest strengths, but it may also become one of ISIS’s greatest weaknesses. ISIS maintains social control by eliminating resistance, but this in turn places technical skills that are essential to run modern cities in shorter supply. In the process of establishing its governance project, ISIS has dismantled state institutions without replacing them with sustainable alternatives. The immediate provision of aid and electricity, for example, does not translate into the creation of a durable economy. The consequence of ISIS’s failure, however, may not be the dismantling of the Caliphate, but rather the devastation of the cities and systems that comprise Iraq and Syria such that they never recover.

Thus far in Syria, ISIS has provided a relative measure of organization in a chaotic environment. This may prompt assessments which overstate ISIS’s efficacy in conducting state functions. Though ISIS certainly has demonstrated intent to commit resources to governance activities, it is yet to demonstrate the capacity for the long-term planning of state institutions and processes. Translating broad military expansions from the summer of 2013 into a well-governed contiguous zone will be ISIS’s most daunting task yet, and may prove to be a critical vulnerability.......

When you bomb half of Islam into the stone age they will eventually regroup. Blowback, karma, payback, utu, revenge is a fact of life. Politicians are oblivious to the long term. The sheep are just beginning to wake up to what they have done. (trashed entire countries for no particular valid reason)

Hey Motley ages since i saw you on the watchtower. You might get more responses to your request if you didn't adopt that kind of smug attitude. Its a bit rude to open by saying you are going to be amused by our cognitive dissonance . Maybe you should try and keep that amusement a bit more discreetly to yourself. It must be amazing having a brain the size of a planet though I am in awe.

NZ & Australia are different countries my good man. You need to understand that Australia is firmly wedged nose first in the buttocks of the US. NZ merely has an unpleasant view.

Yes. China likes us because we don't put poison in baby formula. And we have lots of good farmland & good management practices. And yes, we are pretty easy to get along with (generally speaking). We really don't do radicalism very well, so we tend to ridicule those that do. Point & laff sort of thing.

I hope NZ doesn't forget that we said NO to US military visits when we declared ourselves nuclear free. We were put into the international leper pen by the US when we did. It's good in here

Don't write us off is all I'm saying.

NB we don't have crocodiles, snakes or other stingy things. We do have a poisonous spider if you happen to park your bum on it's beachfront home.

If I don't post my motivation then what usually happens is people question it, and ascribe some dark motives to me. So lately I have tried to make those clear from the start, so it is not a point of contention. In this case however being perfectly frank does make me seem like a smug bastard. Either, or, I lose. :D

I much prefer simply being honest about it.

I suppose I could have tried different wording so as to mask my emotions, but isn't that another form of lying. Fact is, I Will be amused by the cognitive dissonance that results, if this discussion is furthered.

The last swing was a bit low though, wouldn't you say? Was it really necessary.

meluaufeet

I 'm sorry, I am not going to oblige as that necessarily shrinks my target audience significantly. May I suggest you simply put me on ignore? That way you don't have to engage. I know it is an imperfect suggestion, but I think your request unreasonable.

Begrudgingly i went to the LCS on saturday. Averaging down is getting me down. I would like to average up for a couple of years. Anyway the place was pretty slow, a little PMs coming in and a little PMs going out. The numi regulars were picking through the presorted boxes. I spent about an hour in the store. 90% was $13.25 per face value dollar, Wash Qs. My 2 prior purchases were 14.26 (uncirculated dimes) and 14.50 Wash Qs the last few weeks. I spoke to the owner he said it was feast or famine with the 90% and currently he was short on supply. I buy so little that they always have a few bucks of silver around. The owner seems not too interested in the outright price of silver or gold he is just making the mark-up.

perhaps i should have read it before i posted my LCS recap in terms of investment and dollars but i did want to get the update out. i do feel better with a few dollars of silver quarters in my pocket driving home from the coin shop. It is only during the week and another beat down that i start doubting what the heck i am doing..One day will come and the sheeple will cry out how did this happen?

China on Tuesday brushed aside comments linking President Xi Jinping’s Sunday statement urging Chinese armed forces to be ready for a “regional war” to a war with India, saying it was a “wild guess”.

The foreign ministry said China would never allow the long-pending border dispute to influence bilateral relations.

During a meeting with the top officers of the People’s Liberation Army (PLA) on Sunday, Xi had had asked them to improve their combat readiness and be ready to win a regional war.

“Headquarters of all PLA forces should improve their combat readiness and sharpen their ability to win a regional war in the age of information technology,” Xi was quoted by the state media as telling the PLA officers.

Coming at a time when Indian and Chinese soldiers were locked in a stand-off along the disputed boundary in Ladakh, the statement was interpreted – even if in part as China is also embroiled in maritime disputes with other countries off the South and East China seas – as being directed at India.

A day later on Tuesday, the Chinese foreign ministry dismissed the interpretation without getting into details.

“I believe that this may be a wild guess. President Xi concluded his very successful visit to India and was warmly welcomed by the Indian government and Indian people. During his visit two leaders reached important consensus on Sino-Indian relations,” Hua Chunying, spokesperson said at the regular press briefing on Tuesday when asked whether Xi was referring to India when talking about a “regional war”.

Chinese leaders including Xi had earlier brought up the issue of the PLA’s readiness for a “regional war”.

The statements, addressed to PLA officers, have never specified any country as the adversary. Former President Hu Jintao had also talked about PLA’scombat readiness for a regional war during his tenure.

Hua added: “There may be some problems between the two countries but you can be assured that the two leaders also have consensus on such issues that is to solve the disputes through friendly coordination and pending the final settlement we will maintain peace and tranquillity of the border area.”

“We will never allow border area to influence Sino-India relations. So, you may be assured…,” she added.

When asked about the ongoing incursions into Indian territory by the PLA, Hua said the Chinese government had noted the reports.

“As I said earlier China and India have strong willingness and sincerity. Through the existing mechanism we can effectively and properly manage such issue. A far as I am concerned such dispute has been managed and border area is in tranquillity.

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